Fed raises key interest rate and sees possible acceleration in hikes

The media forecasts expect the unemployment rate to drop to 3.6% this year, down from March's projection of 3.8%.

Federal Reserve Chair Jerome "Jay" Powell said job gains are boosting income and confidence, while foreign expansion and tax cuts support additional growth.

The Fed now sees gross domestic product growing 2.8 percent this year, slightly higher than previously forecast, and dipping to 2.4 percent next year, unchanged from policymakers' March projections.

The Fed offered an improved forecast for unemployment this year, lowering its forecast to 3.6%. The most immediately affected will be credit-card interest rates, which are subject to near-instantaneous revision to track the federal funds rate. That's good news because it means the economy is largely moving on its own steam in the eyes of the Fed.

The Fed had said its key rate "is likely to remain, for some time, below levels that are expected to prevail in the longer run". Economic activity is projected to expand 2.4% in 2019, unchanged from the previous forecast; finally, the economy is expected to grow 2.0% in 2020, unchanged from the previous forecast. While the national economy appears to be on solid ground for 2018, the Fed must now consider how growing global trade disputes could slow USA growth. He'll likely address the decision to hike rates and the Fed's views on the overall economic outlook. Consumer and business spending is powering the economy, in part a result of the tax cut President Donald Trump pushed through Congress late past year.

Growth is also expected to stay close to nearly 3 percent of GDP through the year, and Fed officials are eager to prevent the economy from overheating.

While many economists think the current expansion will exceed the 1990's streak, some worry about what might occur once the impact of the tax cuts begin to fade and the Fed's gradual rate hikes begin to curb growth.

United States interest rates are set to rise further and faster than previously planned as surging economic growth forces officials to do more to try to see off the threat of inflation. The average 30-year fixed mortgage rate recently hit a seven-year high, before retreating a bit to 4.54 percent.

The Fed's meeting this week is to be followed by policy meetings of two other major central banks - the European Central Bank on Thursday and the Bank of Japan on Friday.